Out of Class Demand Curve Exercise
Name:
BOB’S DEMAND SCHEDULE FOR VIDEOS
|
Price/Video ($) |
Quantity Demanded |
|
5 |
10 |
|
4 |
20 |
|
3 |
30 |
|
2 |
40 |
|
1 |
50 |
Use the information above to graph Bob’s demand curve (make sure you put all numbers on your graph and label your axes correctly)!
MARKET DEMAND SCHEDULE AND CURVE
QUANTITIES DEMANDED PER YEAR BY:
Fill in the MARKET column (assume these are the only people who buy videos)
|
Price/Video ($) |
Bob |
Betty |
Bess |
Market |
|
5 |
10 |
5 |
15 |
|
|
4 |
20 |
10 |
18 |
|
|
3 |
30 |
15 |
21 |
|
|
2 |
40 |
20 |
24 |
|
|
1 |
50 |
25 |
27 |
|
Once you have determined the market quantity demanded, please graph the MARKET
DEMAND curve (make sure you put all numbers on your graph and label your axes correctly)!
CHANGE IN DEMAND
Now, let’s assume that one of the variables that determine demand has changed and as
a result we have a complete change in the price/quantity relationship. For example,
Bob just got a raise and is now demanding MORE VIDEOS AT EVERY PRICE.
QUANTITY DEMANDED PER YEAR:
PRICE/VIDEO BEFORE AND AFTER BOB’S RAISE
|
Price/Video ($) |
Quantity Demanded |
Quantity Demanded after Raise |
|
5 |
10 |
20 |
|
4 |
20 |
30 |
|
3 |
30 |
40 |
|
2 |
40 |
50 |
|
1 |
50 |
60 |
Use the information above to graph Bob’s original demand curve and his demand curve
after an increase in income (show direction of change with an arrow) and (make sure you put all numbers on your graph and label your axes correctly)!
Are videos a normal or inferior good to Bob? ___________________
CHANGE IN QUANTITY DEMANDED
A change in quantity demanded occurs as a result of a change in price and we move
along the demand curve. Suppose the market price of videos dropped from $3 to $2.
Draw Bob’s original demand curve and show what would happen to quantity demanded (with an arrow) as a result of this change (make sure you put all numbers on your graph and label your axes correctly)!